DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance of the Dreyfus BASIC California
Municipal Money Market Fund for the 12-month period ended June 30, 1998. Your
Fund produced a yield of 3.08% and, after taking into account the effect of
compounding, the effective yield was 3.13%.*
Economic Review
During the past year, the money market went through several phases to reach
its present stage. A year ago, fears of inflation, and of possible Federal
Reserve Board action to curb it, were dominant influences. Then last fall came
the Asian monetary and financial crisis. This set off a flight to the dollar,
and also made the Fed hesitant to take any action that might worsen the Asian
situation. Interest rates were dampened by this combination of events. However,
by late 1997 and early 1998, talk of possible inflation was renewed as the U.S.
economy and the stock market forged ahead to new heights.
A major influence on the money market in the past few months has been
increased evidence of a slowdown in general economic activity. Overall, the
economy appears to be healthy, the job market has been strong, consumers seem to
be in a constructive frame of mind and inflation has remained at bay. However,
the fast pace of expansion that prevailed earlier in the year has clearly
cooled.
The problems in Japan and Southeast Asia are finally having some repercussions
in this country. Demand for our exports from that part of the world has declined
sharply. Furthermore, the flight to the dollar which has resulted from the Asian
problems has made the U.S. dollar very expensive for those trading partners.
Lately, the virtual shutdown of U.S. production at General Motors plants, due
to the UAW strike in Flint, Michigan, has been another factor reducing the pace
of the economy.
Although growth in corporate profits has slowed in many sectors during the
past year, consensus estimates of future profit growth continue to be cut.
Profit margins had already begun to shrink under the weight of rising labor
costs, making companies' reported profits increasingly dependent on growth of
sales. Overall profits could thus prove quite vulnerable to a period of
significantly slower economic growth.
In view of this cooling trend, it has come as no surprise that the Federal
Reserve, though still watchful for signs of wage inflation, has not taken any
recent action to raise interest rates.
Thus, the money market is feeling the effects of economic cross-currents.
Factors tending to restrain interest rates include the demand for U.S.
instruments from foreign investors seeking a "safe haven" as well as the
prospect of the U.S. Government running a budget surplus, thus reducing the need
for Treasury borrowing. Yet, we believe that the continuing economic expansion,
albeit at a lower rate, helped to keep money market rates from going lower than
they did during the reporting period.
Supply of one-year municipal money market notes declined during the first half
of 1998 relative to the first half of 1997 by approximately 12%. Many
traditional borrowers are experiencing improved fiscal balances as a result of
broad domestic economic growth. Consequently, the need to borrow short-term
funds has correspondingly diminished.
Buoyed by the declining interest rate environment in the taxable money
marketplace, yields on one-year tax-exempt money market securities ranged
between 3.70% and 3.55% . Rates ended the reporting period at the lows in
anticipation of heavy demand during the summer months.
Market Environment/Portfolio Activity
California' s economy continued its recent trend of expansion in 1997,
recording its best year since the early 1980s and outpacing the national
average. Further, the June, 1998 unemployment rate of 5.7% was the best posted
by the State since 1990. This expansion has finally broadened its reach, with
the southern part of the State actually growing faster than the San Francisco
valley area. Although Asia represents over half of the State's international
sales, exports still increased 6.1% in 1997. This is mainly due to the sharp
increase in trade with Mexico. This robust economy has allowed the State to
produce balanced operations in the last two fiscal years even as mandated
education spending has risen. Year-to-date numbers indicate that the State will
meet or exceed its revenue projections for fiscal year 1998. Projections are
that the State will eliminate its approximately $3.6 billion unreserved general
fund deficit by fiscal year 2000. California, however, still suffers from a
structural imbalance of revenues to expenditures produced by its high mandated
spending and limited taxing powers. This imbalance could eliminate any positive
trends currently being experienced by the State. Overall, the State's outlook is
positive and if current fiscal health is maintained, rating upgrades could be
seen at the rating agencies. For now, we believe that the State's rating will
remain stable at the mid-A level.
From a strategy standpoint, the Fund's average Portfolio maturity fluctuated
within a range of 25 to 50 days. However, the Fund typically maintained an
average maturity of 35 days during the reporting period. With the backdrop of
continued inactivity from the Federal Reserve, the Fund's strategy was to
maintain a neutral average maturity relative to its peer group.
Sincerely,
[John Flahive signature logo]
John Flahive
Portfolio Manager
July 27, 1998
New York, N.Y.
* Effective yield is based upon dividends declared daily and reinvested monthly
<TABLE>
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
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STATEMENT OF INVESTMENTS JUNE 30, 1998
Principal
Tax Exempt Investments--98.4% Amount Value
- -------------------------------------------------------
_____________ _____________
California--97.9%
Alameda-Contra Costa School Finance Authority, COP, VRDN
(Capital Improvements Financing Project):
<S> <C> <C>
3.20%, Series A (LOC; National Westminster Bank) (a,b) $ 1,000,000 $ 1,000,000
3.20%, Series C (LOC; Canadian Imperial Bank of Commerce) (a,b) 1,200,000 1,200,000
Alameda County, MFMR, Refunding, VRDN (Quail)
3%, Series A (LOC; FNMA) (a,b) 200,000 200,000
Alameda County Industrial Development Authority, Revenue
(Ply Properties Project) 3.50%, Series A (LOC; Wells Fargo Bank) (a,b) 5,150,000 5,150,000
Alameda County Union School District, TRAN 4%, 6/30/99 2,500,000 2,515,200
Anaheim Housing Authority, MFHR, VRDN (Bel Age Project)
3.05%, Series A (LOC; FNMA) (a,b) 1,800,000 1,800,000
California Economic Development Finance Authority, IDR, VRDN:
(Lion Enterprise Inc., Project) 3.60% (LOC; Bank of America) (a,b) 1,000,000 1,000,000
(Volk Enterprises Inc., Project) 3.05% (LOC; Harris Trust and Savings Bank) (a,b) 500,000 500,000
California Health Facilities Finance Authority, Revenue:
Prerefunded (Uni Health America)
7.625%, Series A, 10/1/98 (Escrowed in; U.S. Government Securities) 1,300,000 1,338,999
Refunding (Catholic Healthcare West)
4.50%, Series A, 7/1/98 (Insured; MBIA) 2,340,000 2,340,000
VRDN:
(Catholic Health Care)
3%, Series B (Insured; MBIA and SBPA; Morgan Guaranty Trust Co.) (a) 300,000 300,000
(Pooled Loan Program)
3.10%, Series B (Insured; FGIC) (a) 200,000 200,000
(Scripps Hospital)
3.20%, Series B (Insured; MBIA and LOC; Credit Locale de France) (a,b) 500,000 500,000
California Housing Finance Agency, Revenue, Refunding, VRDN:
(Camino Colony Apartments)
3%, Series B (LOC; FNMA) (a,b) 600,000 600,000
Multi-Family 3%, Series C (LOC; FNMA) (a,b) 1,000,000 1,000,000
California Pollution Control Financing Authority:
PCR (Chervon USA Inc., Project):
3.65%, 5/17/99 (LOC; Chevron USA Inc.) (b) 700,000 700,000
3.70%, 6/15/99 (LOC; Chevron USA Inc.) (b) 1,100,000 1,100,505
VRDN:
PCR, Refunding (Pacific Gas and Electric)
3.25%, Series B (LOC; Rabobank Nederland) (a,b) 1,500,000 1,500,000
RRR, Refunding:
(Ultrapower Malaga) 3.50%, Series A (LOC; Bank of America) (a,b) 100,000 100,000
(Ultrapower Rocklin) 3.50%, Series A (LOC; Bank of America) (a,b) 100,000 100,000
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
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STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
California Statewide Communities Development Authority, Revenue, VRDN:
COP (John Muir/ Mt. Diablo Health)
3.55%, (Insured; AMBAC and Liquidity Facility; Commerzbank) (a) $ 1,000,000 $ 1,000,000
MFHR (Sunrise of Moraga)
3.45%, Series G (LOC; Commerzbank) (a,b) 755,000 755,000
California Statewide Communities Development Corporation, Revenue, VRDN
(Johanson Project)
3.40%, Series E (LOC; California State Teacher Retirement System) (a,b) 825,000 825,000
Conejo Valley Union School District, TRAN 4.25%, 7/2/98 2,000,000 2,000,024
Contra Costa County, CP
3.60%, 8/20/98 (Liquidity Facility; Westdeutsche Landesbank) 1,000,000 1,000,000
Contra Costa Housing Housing Authority, VRDN (Lakeshore)
3%, Series A (LOC; Bank of America) (a,b) 3,000,000 3,000,000
East Bay Regional Park District, Refunding 4.25%, 9/1/98 1,235,000 1,236,415
Eastern Municipal Water District, Water and Sewer Revenue, Refunding, COP, VRDN
3%, Series B (Insured; FGIC and SBPA; Rabobank) (a) 100,000 100,000
Fremont, MFHR, VRDN
3.10%, Series E (LOC: Bayerische Landesbank and Credit Lyonnais) (a,b) 3,000,000 3,000,000
Glendale, Revenue Reliance Development, VRDN (Public Parking)
3.70% (LOC; Barclays Bank) (a,b) 1,900,000 1,900,000
Imperial County, COP, VRDN (Capital Projects)
3.10% (LOC; Canadian Imperial Bank of Commerce) (a,b) 1,000,000 1,000,000
Kern County, COP, VRDN (Kern Public Facilities Project)
3%, Series D (LOC; Union Bank of Switzerland) (a,b) 300,000 300,000
Los Angeles, MFHR, VRDN (Masselin Manor)
3.05% (LOC; Bank of America) (a,b) 800,000 800,000
Los Angeles Convention and Exibition Center Authority, Refunding, COP
6.50%, 8/15/98 (Insured; AMBAC) 400,000 401,431
Los Angeles County, Pension Obligation, Refunding, VRDN
3.10%, Series C (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a) 900,000 900,000
Los Angeles Metropolitan Transportation Authority, Revenue, CP
3.40%, 8/6/98 (LOC: Bayerische Landesbank, Canadian Imperial Bank of Commerce
and
National Westminster Bank) (b) 2,000,000 2,000,000
Los Angeles Regional Airports Improvement Corporation,
Los Angeles International, VRDN:
LR:
(American Airlines):
4%, Series B (LOC; Wachovia Bank and Trust Co.) (a,b) 1,700,000 1,700,000
4%, Series C (LOC; Wachovia Bank and Trust Co.) (a,b) 1,200,000 1,200,000
4%, Series D (LOC; Wachovia Bank and Trust Co.) (a,b) 2,300,000 2,300,000
4%, Series E (LOC; Wachovia Bank and Trust Co.) (a,b) 2,100,000 2,100,000
4%, Series F (LOC; Wachovia Bank and Trust Co.) (a,b) 400,000 400,000
(LAX-2) 4% (LOC; Societe Generale) (a,b) 3,400,000 3,400,000
Terminal Facilities Completion Revenue
4.05% (LOC; Societe Generale) (a,b) 6,300,000 6,300,000
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
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STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
Los Angeles Union School District, TRAN
4.50%, Series A, 7/1/98 $ 2,000,000 $ 2,000,000
Metropolitan Water District, CP
3.50%, Series B, 8/12/98 (Liquidity Facility; Westdeutsche Landesbank) 2,000,000 2,000,000
Modesto, MFHR, Refunding, VRDN (Shadowbrook)
3.55%, Series A (LOC; Bank of America) (a,b) 1,000,000 1,000,000
Moorpark, Multi-Family Revenue, VRDN (LeClub Apartments Project)
3.05%, Series A (LOC; Citibank) (a,b) 1,500,000 1,500,000
Northern Power Agency, Public Power Revenue, Refunding, VRDN (Geothermal Project
# 3)
3.10%, Series A (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a) 1,000,000 1,000,000
Orange County, VRDN:
Apartment Development Revenue, Refunding (Pointe Niguel Project)
3.40%, Series C (LOC; Wells Fargo Bank) (a,b) 1,000,000 1,000,000
COP (Florence Crittendoc Services)
3.20% (LOC; Swiss Bank Corp.) (a,b) 700,000 700,000
Otay Water District, COP, VRDN (Capital Project)
3.15% (LOC; Landesbank Hessen) (a,b) 692,000 692,000
Palm Springs Community Redevelopment Agency, COP, VRDN (Headquarters Hotel):
3.25%, Series I (LOC; Citibank) (a,b) 700,000 700,000
3.25%, Series II (LOC; Citibank) (a,b) 400,000 400,000
3.25%, Series 5 (LOC; Citibank) (a,b) 800,000 800,000
3.25%, Series 8 (LOC; Citibank) (a,b) 200,000 200,000
Pasadena County, COP, VRDN (Rose Bowl Improvements Project)
3.20%, (LOC; Canadian Imperial Bank of Commerce) (a,b) 100,000 100,000
Pomona Public Finance Authority, Revenue, Refunding (Pomona Redevelopment
Project)
4.50%, Series S, 2/1/99 (Insured; MBIA) 305,000 306,553
Riverside County, VRDN:
COP (Riverside County Public Facility)
2.50%, Series B (LOC: Commerz Bank and National Westminster Bank) (a,b) 1,543,000 1,543,000
MFHR (Sierra Pines Apartments Project)
3.15%, Series A (LOC; Swiss Bank Corp.) (a,b) 2,300,000 2,300,000
Sacramento County, MFHR, VRDN (Smoketree)
3%, Series A (LOC; FNMA) (a,b) 100,000 100,000
Sacramento County Sanitation District Finance Authority, Revenue, Refunding
4%, 12/1/98 250,000 250,401
Sacramento Municipal Utility District, Electric Revenue, CP
3.35%, 9/9/98 (LOC: Bayerische Landesbank, Morgan Guaranty Trust Co. and
Westdeutsche Landesbank) (b) 3,000,000 3,000,000
San Diego County:
MFHR, VRDN:
(Country Hills)
3%, Series A (LOC; FNMA) (a,b) 800,000 800,000
(Lusk Mira Mesa Apartments)
3.15%, Series E (LOC; Swiss Bank Corp.) (a,b) 300,000 300,000
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
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STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------
_____________ _____________
San Diego County: (continued)
MFHR, VRDN (continued):
(Nationwide)
3%, Series A (LOC; FNMA) (a,b) $ 100,000 $ 100,000
TRAN 4.50%, 9/30/98 (LOC: Bank of Nova Scotia, Canadian Imperial Bank of Commerce,
and Commerz Bank) (b) 1,500,000 1,502,578
San Francisco City and County Housing Authority, MFHR, VRDN (737 Post Project)
3.35%, Series D (LOC; Banque Nationale de Paris) (a,b) 200,000 200,000
San Francisco City and County Redevelopment Financing Authority, Revenue,
Refunding
VRDN (Yerba Buena Garden)
3.20% (LOC: Bank of Tokyo-Mitsubishi adnd National Westminster Bank) (a,b) 115,000 115,000
San Francisco City and County Union School District, TRAN 4.50%, 10/30/98 2,500,000 2,505,730
San Jose, MFHR, VRDN (Foxchase)
3%, Series B (Insured; FGIC and Liquidity Facility; FGIC) (a) 200,000 200,000
Santa Clara County Housing Authority, MFHR, VRDN (Foxchase)
3%, Series E (Insured; FGIC) (a) 2,600,000 2,600,000
Santa Clara Local Government Finance Authority, Revenue, Refunding, Prerefunded
7.25%, 2/1/99 (Escrowed in; U.S. Government Securities) 250,000 260,140
Southern California Public Power Authority, Revenue, Refunding, VRDN
(Palo Verde Project)
4%, Series C (Insured; AMBAC and SBPA; Morgan Guaranty Trust Co.) (a) 1,000,000 1,000,000
State of California, CP:
3.55%, 8/10/98 (Liquidity Facility: Bayerische Landesbank, Credit Suisse,
Landesbank Hessen and Morgan Guaranty Trust Co.) 2,000,000 2,000,000
3.50%, 9/2/98 (Liquidity Facility: Bayerische Landesbank, Credit Suisse,
Landesbank Hessen and Morgan Guaranty Trust Co.) 1,000,000 1,000,000
Stockton, MFHR, VRDN (Mariners Pointe Association)
3.20%, Series A (LOC; Lasalle National Bank) (a,b) 2,700,000 2,700,000
Vallecitos Water District, Water Revenue, COP, VRDN
(Twin Oaks Reservoir Project) 3% (LOC; Credit Locale de France) (a,b) 1,500,000 1,500,000
Yucaipa-Calimesa Joint Union School Distrcit, TRAN
4%, 6/30/99 1,000,000 1,003,850
U.S. Related--.5%
Commonwealth of Puerto Rico, Public Improvement, Prerefunded
7.75%, Series A, 7/1/98 (Escrowed in; U.S. Government Securities) 500,000 510,000
_____________
TOTAL INVESTMENTS (cost $98,651,826) 98.4% $ 98,651,826
_______ _____________
CASH AND RECEIVABLES (NET) 1.6% $ 1,609,988
_______ _____________
NET ASSETS 100.0% $100,261,814
_______ _____________
</TABLE>
<TABLE>
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
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Summary of Abbreviations
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<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
CP Commercial Paper MFHR Multi-Family Housing Revenue
FGIC Financial Guaranty Insurance Company MFMR Multi-Family Mortgage Revenue
FNMA Federal National Mortgage Association PCR Pollution Control Revenue
IDR Industrial Development Revenue RRR Resources Recovery Revenue
LOC Letter of Credit SBPA Standby Bond Purchase Agreement
TRAN Tax and Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
- -----------------------------------------------------------------------------
Moody's or Standard & Poor's Percentage of Value
________ _________________ ___________________
<S> <C> <C>
VMIG1/MIG1,P1(c) SP1+/SP1, A1+A1(c) 92.3%
Aaa/Aa(d) AAA/AA(d) 7.7
______
100.0%
______
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest rates.
(b) Secured by letters of credit. At June 30, 1998, 68.5% of the Fund's net
assets are backed by letters of credit issued by domestic banks, foreign
banks, government agencies and corporations, of which Bayerische
Landesbank provided letters of credit to 11.0% of the Fund's net assets.
(c) P1 and A1 are the highest ratings assigned tax exempt commercial paper by
Moody's and Standard & Poor's, respectively.
(d) Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
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STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1998
Cost Value
____________ ____________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $ 98,651,826 $ 98,651,826
Cash 4,408,925
Interest receivable 751,117
_____________
103,811,868
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 35,921
Payable for investments securities purchased 3,511,050
Interest payable--Note 3 3,083
_____________
3,550,054
_____________
NET ASSETS $100,261,814
_____________
REPRESENTED BY: Paid-in capital $100,253,814
Accumulated net realized gain (loss) on investments 8,000
_____________
NET ASSETS $100,261,814
_____________
SHARES OUTSTANDING
(UNLIMITED NUMBER OF SHARES OF BENEFICIAL INTEREST AUTHORIZED) 100,253,823
NET ASSET VALUE, offering and redemption price per share $1.00
______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
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STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1998
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income $3,158,607
EXPENSES: Management fee--Note 2 $ 402,329
Interest--Note 3 5,599
___________
Total Expenses 407,928
___________
INVESTMENT INCOME--NET 2,750,679
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) 51,000
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,801,679
___________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
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STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1998 June 30, 1997
______________ _______________
OPERATIONS
<S> <C> <C>
Investment income--net $ 2,750,679 $ 1,848,296
Net realized gain (loss) on investments 51,000 (36,397)
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations 2,801,679 1,811,899
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net (2,750,679) (1,848,296)
Net realized gain on investments (6,603) (3,500)
_____________ _____________
Total Dividends (2,757,282) (1,851,796)
_____________ _____________
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold 190,718,170 189,667,243
Dividends reinvested 2,010,317 1,332,586
Cost of shares redeemed (173,091,554) (147,107,129)
_____________ _____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 19,636,933 43,892,700
_____________ _____________
Total Increase (Decrease) in Net Assets 19,681,330 43,852,803
NET ASSETS:
Beginning of Period 80,580,484 36,727,681
_____________ _____________
End of Period $100,261,814 $ 80,580,484
_____________ _____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
Period Ended Year Ended
Year Ended June 30, June 30, November 30,
__________________________________________
PER SHARE DATA: 1998 1997 1996(1) 1995(2) 1994(3,4) 1993(3,5)
_______ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______ _______ _______ _______ _______ _______
Investment Operations:
Investment income--net .031 .031 .031 .031 .012 .023
_______ _______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net (.031) (.031) (.031) (.031) (.012) (.023)
_______ _______ _______ _______ _______ _______
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______ _______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN 3.13% 3.11% 3.19% 3.10% 1.25% 2.41%
RATIO/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .46% .42% .44% .60% .47%(6) .32%
Ratio of net investment income to average
net assets 3.08% 3.09% 3.36% 3.07% 2.11%(6) 2.40%
Decrease reflected in above expense ratios
due to undertakings by the Manager -- .03% .07% -- .38%(6) .76%
Net Assets, end of period (000's Omitted) $100,262 $80,580 $36,728 $15,538 $17,170 $15,490
- ---------
(1) Effective November 20, 1995, the Fund converted to a single Class Fund,
with the existing Class R shares converted into Investor shares.
The Financial Highlights for the fiscal year ended June 30, 1996 were
calculated using the performance of an Investor share outstanding from
July 1, 1995 to November 19, 1995, and the performance of a Fund share
outstanding from November 20, 1995 to June 30, 1996.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(3) On February 1, 1993 existing shares of the Fund were designated the Retail
Class and the Fund began offering the Institutional Class and Investment
Class of shares. Effective April 4, 1994 the Retail and Institutional
Classes were reclassified as a single class of shares known as the Investor
shares and the Investment Class of shares were reclassified as Trust shares.
Effective October 17, 1994, the Trust shares were reclassified as Class R
shares. The Financial Highlights for the year ended June 30, 1995 are
based upon an Investor share outstanding. The amounts shown for the
period ended June 30, 1994 were calculated using the performance of a
Retail share outstanding from December 1, 1993 to April 3, 1994, and the
performance of an Investor share outstanding from April 4, 1994 to June
30, 1994. The Financial Highlights for the year ended November 30, 1993 and
prior periods are based upon a Retail share outstanding.
(4) The Fund changed its fiscal year end to June 30. Prior to this, the Fund's
fiscal year end was November 30. Prior to April 4, 1994, The Boston
Company Advisors, Inc. served as the Fund' s investment adviser. From
April 4, 1994 through October 16, 1994, Mellon Bank, N.A., served as
the Fund's investment manager.
(5) The per share amount has been calculated using the monthly average shares
method, which more appropriately presents per share data for the period
since use of the undistributed net investment income method did not
accord with results of operations.
(6) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC California Municipal Money Market Fund (the "Fund") is a
separate non-diversified series of The Dreyfus/Laurel Tax-Free Municipal Funds
(the "Trust" ) which is registered under the Investment Company Act of 1940
(" Act" ) as an open-end management investment company and operates as a series
company currently offering seven series including the Fund. The Fund' s
investment objective is to provide a high level of current income exempt from
Federal and State of California personal income taxes to the extent consistent
with the preservation of capital and the maintenance of liquidity by investing
in high quality, short-term municipal securities. The Dreyfus Corporation
(" Manager" ) serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. is the
distributor of the Fund's shares.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Trustees to represent the fair value of the Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Interest income, adjusted for amortization of
premiums and original issue discounts on investments, is earned from settlement
date and recognized on the accrual basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Cost of investments
represents amortized cost. Under the terms of the custodian agreement, the Fund
receives net earnings credits based on available cash balances left on deposit.
(C) CONCENTRATION OF RISK: The Fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect the ability
of issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the Fund.
(D) DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
At June 30, 1998, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
Investment management fee: Pursuant to an Investment Management agreement with
the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .45% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, fees and expenses of non-interested Trustees (including counsel
fees) and extraordinary expenses. In addition, the Manager is required to reduce
its fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel) . Each trustee receives
$27,000 per year, $1,000 for each Board meeting attended and $750 for each Audit
Committee meeting attended and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional annual fee of $25,000
per year. These fees pertain to the following funds: The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds
Trust. (The $1,000 attendance fee and reimbursement of meeting expenses also are
borne pro rata by Dreyfus High Yield Strategies Fund). These fees and expenses
are allocated to each series based on net assets. Amounts required to be paid by
the Trust directly to the non-interested Trustees, that would be applied to
offset a portion of the management fee payable to the Manager are in fact paid
directly by the Manager to the non-interested Trustees.
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings.
The average daily amount of borrowings outstanding during the period ended
June 30, 1998 was approximately $92,000, with a related weighted average
annualized interest rate of 6.07%.
DREYFUS BASIC CALIFORNIA MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus BASIC California Municipal
Money Market Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30,
1998, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years or period in the
five-year period then ended. These financial statements and financial highlights
are the responsibility of the Fund' s management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits. The financial highlights for the year ended November 30, 1993
were audited by other auditors whose report thereon dated January 18, 1994
expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1998, by correspondence with the custodian. As to securities purchased, but
not received, we performed other appropriate auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus BASIC California Municipal Money Market Fund of The Dreyfus/Laurel
Tax-Free Municipal Funds as of June 30, 1998, the results of its operations for
the year then ended, changes in its net assets for each of the years in the
two-year period then ended and its financial highlights for each of the years or
period in the five-year period then ended, in conformity with generally accepted
accounting principles.
KPMG Peat Warwick LLP
New York, New York
August 13, 1998
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended June 30,
1998 as "exempt-interest divdends" (not subject to regular Federal and, for
individuals who are California residents, California personal income taxes).
(reg.tm)
(reg.tm)
DREYFUS BASIC CALIFORNIA
MUNICIPAL MONEY MARKET FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 307AR986
BASIC California
Municipal Money
Market Fund
Annual Report
June 30, 1998
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance of the Dreyfus BASIC New York
Municipal Money Market Fund for the 12-month period ended June 30, 1998. Your
Fund produced a yield of 3.10% and, after taking into account the effect of
compounding, the effective yield was 3.14.*
ECONOMIC REVIEW
During the past year, the money market went through several phases to reach
its present stage. A year ago, fears of inflation, and of possible Federal
Reserve Board action to curb it, were dominant influences. Then last fall came
the Asian monetary and financial crisis. This set off a flight to the dollar,
and also made the Fed hesitant to take any action that might worsen the Asian
situation. Interest rates were dampened by this combination of events. However,
by late 1997 and early 1998, talk of possible inflation was renewed as the U.S.
economy and the stock market forged ahead to new heights.
A major influence on the money market in the past few months has been
increased evidence of a slowdown in general economic activity. Overall, the
economy appears to be healthy, the job market has been strong, consumers seem to
be in a constructive frame of mind and inflation has remained at bay. However,
the fast pace of expansion that prevailed earlier in the year has clearly
cooled.
The problems in Japan and Southeast Asia are finally having some repercussions
in this country. Demand for our exports from that part of the world has declined
sharply. Furthermore, the flight to the dollar which has resulted from the Asian
problems has made the U.S. dollar very expensive for those trading partners.
Lately, the virtual shutdown of U.S. production at General Motors plants, due
to the UAW strike in Flint, Michigan, has been another factor reducing the pace
of the economy.
Although growth in corporate profits has slowed in many sectors during the
past year, consensus estimates of future profit growth continue to be cut.
Profit margins had already begun to shrink under the weight of rising labor
costs, making companies' reported profits increasingly dependent on growth of
sales. Overall profits could thus prove quite vulnerable to a period of
significantly slower economic growth.
In view of this cooling trend, it has come as no surprise that the Federal
Reserve, though still watchful for signs of wage inflation, has not taken any
recent action to raise interest rates.
Thus, the money market is feeling the effects of economic cross-currents.
Factors tending to restrain interest rates include the demand for U.S.
instruments from foreign investors seeking a "safe haven" as well as the
prospect of the U.S. Government running a budget surplus, thus reducing the need
for Treasury borrowing. Yet, we believe that the continuing economic expansion,
albeit at a lower rate, helped to keep money market rates from going lower than
they did during the reporting period.
Supply of one-year municipal money market notes declined during the first half
of 1998 relative to the first half of 1997 by approximately 12%. Many
traditional borrowers are experiencing improved fiscal balances as a result of
broad domestic economic growth. Consequently, the need to borrow short-term
funds has correspondingly diminished.
Buoyed by the declining interest rate environment in the taxable money
marketplace, yields on one-year tax-exempt money market securities ranged
between 3.70% and 3.55% . Rates ended the reporting period at the lows in
anticipation of heavy demand during the summer months.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
New York State's improved policies of monitoring and management of the budget
during the year, coupled with its economic expansion, has produced its third
consecutive year of record financial performance. In fiscal year 1998, the State
recorded a $2.0 billion budgetary surplus. These results have allowed the State
to reduce its large general fund balance deficits by nearly two-thirds, with the
GAAP deficit reaching just below $1 billion in 1997. The State has also passed
the 1999 budget in record time, providing for a $902 million surplus which, we
believe, will likely grow over the course of the year. Long-term, however, there
remain many risks to this financial turnaround. The State still has a structural
imbalance between revenues and expenditures which could cause the elimination of
the surpluses built up if an economic slowdown occurs. Further, the economy's
expansion is not broad based. The financial services sector is recording
phenomenal growth. However, the overall economy is still growing below national
rates. As long as Wall Street continues in a bull market, we believe that the
State should continue to record positive financial performance. Standard and
Poor' s and Moody' s have rated New York State at the mid-A level, and do not
foresee an upgrade in the near future. Both cite the narrow economic expansion,
large debt levels, and long-term risks associated with the State's budget and
forecasts.
From a strategy standpoint, the Fund's average Portfolio maturity fluctuated
within a range of 35 to 55 days. However, the Fund typically maintained an
average maturity of 45 days during the reporting period. With the backdrop of
continued inactivity from the Federal Reserve, the Fund's strategy was to
maintain a neutral average maturity relative to its peer group.
Sincerely,
[John Flahive signature logo]
John Flahive
Portfolio Manager
July 27, 1998
New York, N.Y.
* Effective yield is based upon dividends declared daily and reinvested monthly
<TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS JUNE 30, 1998
Principal
Tax Exempt Investments--100.7% Amount Value
- ------------------------------------------------------- _____________ ____________
New York--100.6%
Albany Industrial Development Agency, IDR, VRDN (Newkirk Products Inc., Project
<S> <C> <C>
3.55%, Series A (LOC; Fleet Bank) (a,b) . . . . . . . . . . . . . . . . . . . . . . . . $ 1,620,000 $ 1,620,000
Babylon Industrial Development Agency, RRR, VRDN
(Equity Babylon Project) 4% (LOC; Union Bank of Switzerland) (a,b) . . . . . . . . . . . 15,300,000 15,300,000
Broome County Industrial Development Agency, IDR, Refunding, VRDN
(Bing Realty Co. Project) 3.60% (LOC; Meridian Bank Corp.) (a,b) . . . . . . . . . . . . 1,850,000 1,850,000
Chemung County Industrial Development Agency, Civic Facility Revenue, VRDN
(Arnot Ogden Medical Center) 3.35% (LOC; Chase Manhattan Bank) (a,b) . . . . . . . . . . 2,530,000 2,530,000
Erie County, RAN 5%, Series A, 10/29/98 (LOC; Union Bank of Switzerland) (a) . . . . . . . 2,000,000 2,005,879
Erie County Water Authority, Water Revenue, VRDN
3.25%, Series A (Insured; AMBAC and SBPA; Union Bank of Switzerland) (b) . . . . . . . . 2,000,000 2,000,000
Franklin County Industrial Development Agency, IDR, VRDN
(Kes Chateaugay Limited Partnership LP Project)
4.05%, Series A (LOC; Bank of Tokyo-Mitsubishi) (a,b) . . . . . . . . . . . . . . . . . 500,000 500,000
Great Neck North Water Authority, Water System Revenue, Refunding, VRDN
3.45% Series A (Insured; FGIC and SBPA; FGIC) (b) . . . . . . . . . . . . . . . . . . . 8,600,000 8,600,000
Jefferson County Industrial Development Agency, IDR, VRDN (Watertown-Carthage
IV)
3.70% (LOC; First National Bank of Chicago) (a,b) . . . . . . . . . . . . . . . . . . . 100,000 100,000
Long Island Power Authority, Electric System Revenue, VRDN
3.80%, Sub-Series 6 (LOC: ABN-Amro Bank and Morgan Guaranty Trust Co.) (a,b) . . . . . . 3,000,000 3,000,000
Montgomery Industrial Development Agency, IDR, VRDN (Service Merchandise Co.)
3.65% (LOC; Canadian Imperial Bank of Commerce) (a,b) . . . . . . . . . . . . . . . . . 200,000 200,000
Municipal Assistance Corporation:
CP 3.60%, Series F, 8/11/98 (Insured; AMBAC and SBPA: Bank of Nova Scotia and
National Westminster Bank) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000,000 8,000,000
Refunding 4.20%, Series D, 7/1/98 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . 5,025,000 5,025,000
VRDN 3.20%, Series K-1 (LOC: Municipal Assistance Corp and
Westdeutsche Landesbank) (a,b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,100,000 15,100,000
Nassau County:
General Improvement:
4.80%, Series X, 11/1/98 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . 5,766,000 5,784,455
4%, Series Y, 3/1/99 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . 9,153,000 9,179,001
TAN 4.25%, Series B, 8/31/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,003,062
New York City:
CP:
3.65%, Series J-2, 10/28/98 (LOC; Commerzbank) (a) . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
3.65%, Series J-3, 10/29/98 (LOC; Morgan Guaranty Trust Co.) (a) . . . . . . . . . . . 2,000,000 2,000,000
3.70%, Series H-4, 11/19/98 (Insured; AMBAC, LOC; Krediet Bank) (a) . . . . . . . . . 2,000,000 2,000,000
VRDN:
4%, Series B (Insured; MBIA and LOC; National Westminster Bank) (a,b) . . . . . . . . 200,000 200,000
3.45%, SubSeries A-6 (LOC; Landesbank Hessen) (a,b) . . . . . . . . . . . . . . . . . 2,530,000 2,530,000
4%, SubSeries A-5 (LOC; Krediet Bank)(a,b) . . . . . . . . . . . . . . . . . . . . . . 5,900,000 5,900,000
4%, SubSeries A-8 (LOC; Morgan Guaranty Trust Co.)(a,b) . . . . . . . . . . . . . . . 800,000 800,000
</TABLE>
<TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ ____________
New York (continued)
New York City Health and Hospital Corporation, Revenue, VRDN (Health Systems):
<S> <C> <C>
3.20%, Series A (LOC; Morgan Guaranty Trust Co.) (a,b) . . . . . . . . . . . . . . . . $ 14,700,000 $ 14,700,000
3.20%, Series D (LOC; Bank of Nova Scotia) (a,b) . . . . . . . . . . . . . . . . . . . 12,000,000 12,000,000
3.30%, Series B (LOC; Canadian Imperial Bank of Commerce) (a,b) . . . . . . . . . . . 4,900,000 4,900,000
New York City Housing Development Corporation, VRDN:
MFMR:
(Columbus) 3.35%, Series A (LOC; Citibank) (a,b) . . . . . . . . . . . . . . . . . . . 900,000 900,000
(West 89th Street) 3.30%, Series A (LOC; Midland Bank) (a,b) . . . . . . . . . . . . . 12,500,000 12,500,000
Multi-Family Rental Housing Revenue:
(Carnegie Park) 3.20%, Series A (LOC; FNMA) (a,b) . . . . . . . . . . . . . . . . . . 2,200,000 2,200,000
(Columbus Green) 3.20%, Series A (LOC; FNMA) (a,b) . . . . . . . . . . . . . . . . . . 1,375,000 1,375,000
(Monterey) 3.20%, Series A (LOC; FNMA) (a,b) . . . . . . . . . . . . . . . . . . . . . 12,700,000 12,700,000
New York City Industrial Development Agency, Civic Facility Revenue
(USTA National Tennis Center Project) 5.50%, 11/15/98 (Insured; FSA) . . . . . . . . . . 2,960,000 2,981,536
New York City Municipal Water Finance Authority, Water and Sewer Systems
Revenue:
CP 3.60% Series 5A, 7/15/98 (LOC: Bayerische Landesbank, Landesbank Hessen and
Westdeutsche Landesbank) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000
VRDN:
3.75%, Series G (Insured; FGIC and SBPA; FGIC) (b) . . . . . . . . . . . . . . . . . . 1,100,000 1,100,000
3.80%, Series A (Insured; FGIC and SBPA; FGIC) (b) . . . . . . . . . . . . . . . . . . 8,600,000 8,600,000
4%, Series C (Insured; FGIC and SBPA; FGIC) (b) . . . . . . . . . . . . . . . . . . . 2,800,000 2,800,000
New York City Trust, Cultural Resource Revenue, Refunding, VRDN:
(American Museum of National History)
3.25%, Series A (Insured; MBIA and SBPA; Credit Suisse) (b) . . . . . . . . . . . . . 3,800,000 3,800,000
(Salomon R Guggenheim)
3.85%, Series B (LOC; Swiss Bank Corp.) (a,b) . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
New York State 6.625%, 8/1/98 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,002,583
New York State Dormitory Authority, Revenues:
CP (Memorial Sloan Kettering)
3.60%, 9/15/98 (LOC; Chase Manhattan Bank) (a) . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
Refunding (New York University)
4%, Series A, 7/1/98 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
VRDN:
(New York Public Library)
3.20%, Series B (LOC; Canadian Imperial Bank of Commerce) (a,b) . . . . . . . . . . 3,900,000 3,900,000
(Metropolitan Museum of Art):
3.20%, Series A (Guaranty; Metropolitan Museum of Art) (b) . . . . . . . . . . . . 3,200,000 3,200,000
3.20%, Series B (Guaranty; Metropolitan Museum of Art) (b) . . . . . . . . . . . . 1,760,000 1,760,000
New York State Energy, Research and Development Authority:
PCR:
(LILCO Project)
3.58%, Series A, 3/1/99 (LOC; Deutsche Bank) (a) . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
(New York State Electric and Gas):
3.80%, Series B, 10/15/98 (LOC; Union Bank of Switzerland) (a) . . . . . . . . . . 3,250,000 3,250,000
3.58%, Series A, 3/15/99 (LOC; Morgan Guaranty Trust Co.) (a) . . . . . . . . . . . 2,000,000 2,000,000
</TABLE>
<TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ ____________
New York (continued)
New York State Energy, Research and Development Authority: (continued)
VRDN:
Electric Facilities Revenue (LILCO Project)
<S> <C> <C>
3.60%, Series A (LOC; Toronto-Dominion Bank) (a,b) . . . . . . . . . . . . . . . . $ 500,000 $ 500,000
Gas Facilities Revenue (Brooklyn Union Gas Project):
3.35%, Series A-2 (Insured; MBIA and SBPA; United Bank of Switzerland) (b) . . . . 4,700,000 4,700,000
3.45%, Series A-1 (Insured; MBIA and SBPA; United Bank of Switzerland) (b) . . . . 4,900,000 4,900,000
PCR
(Central Hudson Gas and Electric)
3.50%, Series B (LOC; Deutsche Bank) (a,b) . . . . . . . . . . . . . . . . . . . . 5,700,000 5,700,000
New York State Environmental Facilities Corporation, SWDR, Refunding, CP
(General Electric Co. Project)
3.65%, Series A, 8/14/98 (LOC; General Electric Co.) (a) . . . . . . . . . . . . . . . 8,050,000 8,050,000
New York State Environmental Quality, CP:
3.35%, Series A, 8/12/98 (LOC: Bayerische Landesbank and Landesbank Hessen) (a) . . . . 8,000,000 8,000,000
3.70%, Series A, 8/12/98 (LOC: Bayerische Landesbank and Landesbank Hessen) (a) . . . . 1,000,000 1,000,000
3.50%, Series A, 9/3/98 (LOC: Bayerische Landesbank, Landesbank Hessen and
Morgan Guaranty Trust Co.) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
3.55%, Series A, 9/3/98 (LOC: Bayerische Landesbank, Landesbank Hessen and
Morgan Guaranty Trust Co.) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
New York State Housing Finance Agency, VRDN:
HR (East 84th Streest) 3.30%, Series A (LOC; Fleet Bank) (a,b) . . . . . . . . . . . . . 4,600,000 4,600,000
Revenue (250 West 50th Street) 3.30%, Series A (LOC; Fleet Bank) (a,b) . . . . . . . . . 3,000,000 3,000,000
New York State Job Development Authority, VRDN:
3.85%, Series A-1 Thru A-21 (Guaranty; New York State and SBPA: Bayerische
Landesbank
and Morgan Guaranty Trust Co.) (b) . . . . . . . . . . . . . . . . . . . . . . . . . . 4,820,000 4,820,000
3.85%, Series A-1 Thru A-25 (LOC; Sumitomo Bank) (a,b) . . . . . . . . . . . . . . . . . 2,605,000 2,605,000
3.85%, Series B-1 Thru B-9 (Guaranty; New York State and SBPA: Bayerische Landesbank
and Morgan Guaranty Trust Co.) (b) . . . . . . . . . . . . . . . . . . . . . . . . . . 4,130,000 4,130,000
4%, Series A-1 Thru A-13 (Guaranty; New York State and SBPA: Bayerische Landesbank
and Morgan Guaranty Trust Co.) (b) . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000 600,000
4%, Series B-1 Thru B-9 (Guaranty; New York State and SBPA: Bayerische Landesbank
and Morgan Guaranty Trust Co.) (b) . . . . . . . . . . . . . . . . . . . . . . . . . . 2,020,000 2,020,000
New York State Local Governmental Assistance Corporation, VRDN:
3.15%, Series B (LOC; Krediet Bank) (a,b) . . . . . . . . . . . . . . . . . . . . . . . 7,800,000 7,800,000
3.15%, Series F (LOC; Toronto-Dominion Bank) (a,b) . . . . . . . . . . . . . . . . . . . 4,500,000 4,500,000
3.30%, Series E (LOC; Canadian Imperial Bank of Commerce) (a,b) . . . . . . . . . . . . 1,900,000 1,900,000
New York State Medical Care Facilities Finance Agency, Revenue, VRDN
(Lenox Hill Hospital)
3.35%, Series A (LOC; Chase Manhattan Bank) (a,b) . . . . . . . . . . . . . . . . . . 500,000 500,000
(Pooled Equipment Loan Program II)
3.30%, Series A (LOC; Chase Manhattan Bank) (a,b) . . . . . . . . . . . . . . . . . . 3,300,000 3,300,000
Niagara Falls Bridge Commission, Toll Revenue, VRDN
3.25%, Series A (Insured; FGIC and SBPA; Credit Locale de France) (b) . . . . . . . . . 6,000,000 6,000,000
</TABLE>
<TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ ____________
New York (continued)
Onondaga County Industrial Development Agency, IDR, VRDN
(First Republic Corp. American)
<S> <C> <C>
3.35% (LOC; Chase Manhattan Bank) (a,b) . . . . . . . . . . . . . . . . . . . . . . . . $ 600,000 $ 600,000
Rensselaer County Industrial Development Agency, Civic Facility, Revenue, VRDN
(Polytech Institute Project) 3.40%, Series A (LOC; Rennselaer Polytech Institute) (b) . 4,400,000 4,400,000
Rochester, BAN 4%, Series I, 3/9/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000,000 8,023,886
Saint Lawrence Industrial Development Agency, Environment Improvement Revenue,
VRDN
(Reynolds Metals Co. Project) 3.50% (LOC; Royal Bank of Canada) (a,b) . . . . . . . . . 1,200,000 1,200,000
Schenectady Industrial Development Agency, VRDN (Union College Project)
3.40%, Series A (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,405,000 5,405,000
Suffolk County Industrial Development Agency, Civic Facility Revenue, VRDN
(Suffolk Child Care Center Project) 3.45% (LOC; Barclays Bank) (a,b) . . . . . . . . . . 3,100,000 3,100,000
Triborough Bridge and Tunnel Authority, Revenue, Refunding, Prerefunded,
General Purpose:
7%, Series P, 1/1/99 (Escrowed in; U.S. Government Securities) . . . . . . . . . . . . 1,000,000 1,031,961
7.50%, Series O, 1/1/99 (Escrowed in; U.S. Government Securities and Insured; FGIC) . 1,485,000 1,538,344
Westchester County 4.50%, Series D, 11/15/98 . . . . . . . . . . . . . . . . . . . . . . . 8,120,000 8,142,652
Yonkers Industrial Development Agency, Civil Facility Revenue, VRDN
(Consumers Union Facility)
3.45% (Insured; AMBAC and SBPA; Credit Locale de France) (b) . . . . . . . . . . . . . . 3,500,000 3,500,000
U.S. Related--.1%
Puerto Rico Industrial Medical and Environmental Pollution Control Facility
Finance Authority, Revenue, VRDN
(AGMEF Project) 3.65% (LOC; Bank of Tokyo-Mitsubishi) (a,b) . . . . . . . . . . . . . . 200,000 200,000
_____________
TOTAL INVESTMENTS (cost $336,663,359). . . . . . . . . . . . . . . . . . . . . . . . . . . 100.7% $336,663,359
_______ _____________
LIABILITIES, LESS CASH AND RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . (.7%) $ (2,174,887)
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $334,488,472
_______ _____________
</TABLE>
<TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
Summary of Abbreviations
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
BAN Bond Anticipation Notes Insurance Corporation
CP Commercial Paper MFMR Multi-Family Mortgage Revenue
FGIC Financial Guaranty Insurance Company PCR Pollution Control Revenue
FNMA Federal National Mortgage Association RAN Revenue Anticipation Notes
FSA Financial security Assurance RRR Resources Recovery Revenue
HR Hospital Revenue SBPA Standby Bond Purchase Agreement
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit TAN Tan Anticipation Notes
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
- -----------------------------------------------------------------------------
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
_______ ________ _________________ ___________________
<S> <C> <C> <C>
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 86.0%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 11.7
Not Rated (f) Not Rated (f) Not Rated (f) 2.3
_______
100.0%
_______
Notes to Statement of Investments:
</TABLE>
- -----------------------------------------------------------------------------
(a) Secured by letters of credit. At June 30, 1998, 62.4% of the Fund's net
assets are backed by letters of credit issued by domestic banks, foreign
bank corporations and government agencies, of which Bayerische Landesbank
and Morgan Guaranty Trust Co. provided letters of credit to 10.3% and 10.9%
of the Fund's net assets, respectively.
(b) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest rates.
(c) Fitch currently provides creditworthiness information for a limited number
of investments.
(d) P1 and A1 are the highest ratings assigned tax exempt commercial paper by
Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
(f) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1998
Cost Value
_____________ ____________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $336,663,359 $336,663,359
Interest receivable . . . . . . . . . . . . . . . . . . . 2,144,055
_____________
338,807,414
_____________
LIABILITIES: Due to The Dreyfus Corporation . . . . . . . . . . . . . 125,738
Cash overdraft due to Custodian . . . . . . . . . . . . . 4,189,768
Interest payable--Note 3 . . . . . . . . . . . . . . . . 3,436
_____________
4,318,942
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $334,488,472
_____________
REPRESENTED BY: Paid--in capital . . . . . . . . . . . . . . . . . . . . $334,488,482
Accumulated net realized gain (loss) on investments . . . (10)
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $334,488,472
_____________
SHARES OUTSTANDING
(UNLIMITED NUMBER OF SHARES OF BENEFICIAL INTEREST AUTHORIZED) . . . . . . . . . . . . . . 334,488,482
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $ 1.00
_______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1998
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $11,297,202
EXPENSES: Management fee--Note 2 . . . . . . . . . . . . . . . . . $ 1,435,212
Interest expense--Note 3 . . . . . . . . . . . . . . . . 4,709
____________
1,439,921
____________
INVESTMENT INCOME--NET, representing net increase in net assets
resulting from operations . . . . . . . . . . . . . . . . $ 9,857,281
____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1998 June 30, 1997
_____________ ____________
OPERATIONS:
<S> <C> <C>
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,857,281 $ 7,309,990
Net realized gain (loss) from investments . . . . . . . . . . . . . . . . . . . . . . -- 1,425
_____________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . 9,857,281 7,311,415
_____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,857,281) (7,309,990)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . (1,034) --
_____________ _____________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,858,315) (7,309,990)
_____________ _____________
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376,447,696 404,312,797
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,002,552 6,613,748
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (323,504,736) (294,875,277)
_____________ _____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions . . . . . 61,945,512 116,051,268
_____________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . 61,944,478 116,052,693
NET ASSETS
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272,543,994 156,491,301
_____________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $334,488,472 $272,543,994
_____________ _____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
Period Ended Period Ended
Year Ended June 30, June 30, November 30,
_____________________________________________
PER SHARE DATA: 1998 1997 1996(1) 1995(2,3) 1994(2,4) 1993(2)
______ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . .031 .031 .031 .029 .012 .021
______ ______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . (.031) (.031) (.031) (.029) (.012) (.021)
______ ______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______ ______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . . 3.14% 3.11% 3.14% 2.95% 1.23% 2.15%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . .45% .41% .43% .60% .44%(5) .31%
Ratio of net investment income to
average net assets . . . . . . . . . . . . 3.09% 3.08% 3.43% 2.97% 2.12%(5) 2.13%
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . -- .04% .09% -- .53%(5) .98%
Net Assets, end of period (000's Omitted) . . . $334,488 $272,544 $156,491 $21,739 $8,011 $9,356
- ------------------------
(1) Effective December 8, 1995, the Fund's Investor shares and Class R shares
were eliminated and the Fund became a single class Fund without a
class designation. The Financial Highlights for the fiscal year ended
June 30, 1996 were calculated using the performance of an Investor share
outstanding from July 1, 1995 to December 7, 1995, and the performance
of a Fund share outstanding from December 8, 1995 to June 30, 1996.
(2) On February 1, 1993 existing shares of the Fund were designated the Retail
Class and the Fund began offering the Institutional Class and Investment
Class of shares. Effective April 4, 1994 the Retail and Institutional
Classes were reclassified as a single class of shares known as
Investor shares and the Investment Class shares were reclassified as Trust
Shares. Effective October 17, 1994 the Trust shares were reclassified
as Class R shares. The Financial Highlights for the year ended June
30, 1995 are based upon an Investor share outstanding. The amounts shown
for the period ended June 30, 1994 were calculated using the
performance of a Retail share outstanding from December 31, 1993 to April 3,
1994, and the performance of an Investor share outstanding from April
4,1994 to June 30, 1994. The Financial Highlights for the year ended
November 30, 1993 and prior periods are based upon a Retail share
outstanding.
(3) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(4) The Fund changed its fiscal year end to June 30. Prior to this, the Fund's
fiscal year was November 30. Prior to April 4, 1994, The Boston Company
Advisors, Inc. served as the Fund's investment adviser. From April 4, 1994
through October 16, 1994, Mellon Bank, N.A. served as the Fund's investment
manager.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC New York Municipal Money Market Fund (the "Fund") is a separate
non-diversified series of The Dreyfus/Laurel Tax-Free Municipal Funds (the
"Trust") which is registered under the Investment Company Act of 1940 ("Act") as
an open-end management investment company and operates as a series company
currently offering seven series including the Fund. The Fund's investment
objective is to provide a high level of current income exempt from Federal
income taxes and New York State and New York City personal income taxes to the
extent consistent with the preservation of capital and the maintenance of
liquidity by investing in high quality, short-term municipal securities. The
Dreyfus Corporation (" Manager" ) serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund
Services, Inc. is the distributor of the Fund's shares.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Trustees to represent the fair value of the Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Interest income, adjusted for amortization of
premiums and original issue discounts on investments, is earned from settlement
date and recognized on the accrual basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Cost of investments
represents amortized cost. Under the terms of the custodian agreement, the Fund
receives net earnings credits based on available cash balances left on deposit.
(C) CONCENTRATION OF RISK: The Fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect the ability
of issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the Fund.
(D) DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
At June 30, 1998, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 2--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
INVESTMENT MANAGEMENT FEE: Pursuant to an Investment Management Agreement with
the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET
FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
accordance with its investment objective, policies and limitations. For these
services, the Fund is contractually obligated to pay the Manager a fee,
calculated daily and paid monthly, at the annual rate of .45% of the value of
the Fund's average daily net assets. Out of its fee, the Manager pays all of the
expenses of the Fund except brokerage fees, taxes, interest, fees and expenses
of non-interested Trustees (including counsel fees) and extraordinary expenses.
In addition, the Manager is required to reduce its fee in an amount equal to the
Fund' s allocable portion of fees and expenses of the non-interested Trustees
(including counsel) . Each trustee receives $27,000 per year, $1,000 for each
Board meeting attended and $750 for each Audit Committee meeting attended and is
reimbursed for travel and out-of-pocket expenses. The Chairman of the Board
receives an additional annual fee of $25,000 per year. These fees pertain to the
following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free
Municipal Funds and The Dreyfus/Laurel Funds Trust. (The $1000 attendance fee
and reimbursement of meeting expenses are also borne pro rata by Dreyfus High
Yield Strategies Fund) . These fees and expenses are allocated to each series
based on net assets. Amounts required to be paid directly by the Trust directly
to the non-interested Trustees, that would be applied to offset a portion of the
management fee payable to the Manager, are in fact paid directly by the Manager
to the non-interested Trustees.
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million line
of credit primarily to be utilized for temporary or emergency purposes,
including the financing of redemptions. Interest is charged to the Fund at rates
which are related to the Federal Funds rate in effect at the time of borrowings
The average daily amount of borrowings outstanding during the period ended
June 30, 1998 was approximately $81,300, with a related weighted average
annualized interest rate of 5.79%.
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus BASIC New York Municipal
Money Market Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30,
1998, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years or period in the
five-year period then ended. These financial statements and financial highlights
are the responsibility of the Fund' s management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits. The financial highlights for the year ended November 30, 1993
were audited by other auditors whose report thereon, dated January 18, 1994,
expressed an unqualified opinion on these financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
as of June 30, 1998, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus BASIC New York Municipal Money Market Fund of The Dreyfus/Laurel
Tax-Free Municipal Funds as of June 30, 1998, the results of its operations for
the year then ended, changes in its net assets for each of the years in the
two-year period then ended and its financial highlights for each of the years or
period in the five-year period then ended, in conformity with generally accepted
accounting principles.
KPMG Peat Warwick LLP
New York, New York
August 13, 1998
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended June 30,
1998 as "exempt-interest dividends" (not subject to regular Federal and, for
individuals who are New York residents, New York State and New York City
personal income taxes).
[reg.tm signature logo]
(reg.tm)
DREYFUS BASIC NEW YORK
MUNICIPAL MONEY MARKET FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 316AR986
BASIC New York
Municipal Money
Market Fund
Annual Report
June 30, 1998
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance of the Dreyfus BASIC Massachusetts
Municipal Money Market Fund for the 12-month period ended June 30, 1998. Your
Fund produced a yield of 3.09% and, after taking into account the effect of
compounding, the effective yield was 3.13%.*
ECONOMIC REVIEW
During the past year, the money market went through several phases to reach
its present stage. A year ago, fears of inflation, and of possible Federal
Reserve Board action to curb it, were dominant influences. Then last fall came
the Asian monetary and financial crisis. This set off a flight to the dollar,
and also made the Fed hesitant to take any action that might worsen the Asian
situation. Interest rates were dampened by this combination of events. However,
by late 1997 and early 1998, talk of possible inflation was renewed as the U.S.
economy and the stock market forged ahead to new heights.
A major influence on the money market in the past few months has been
increased evidence of a slowdown in general economic activity. Overall, the
economy appears to be healthy, the job market has been strong, consumers seem to
be in a constructive frame of mind and inflation has remained at bay. However,
the fast pace of expansion that prevailed earlier in the year has clearly
cooled.
The problems in Japan and Southeast Asia are finally having some repercussions
in this country. Demand for our exports from that part of the world has declined
sharply. Furthermore, the flight to the dollar which has resulted from the Asian
problems has made the U.S. dollar very expensive for those trading partners.
Lately, the virtual shutdown of U.S. production at General Motors plants, due
to the UAW strike in Flint, Michigan, has been another factor reducing the pace
of the economy.
Although growth in corporate profits has slowed in many sectors during the
past year, consensus estimates of future profit growth continue to be cut.
Profit margins had already begun to shrink under the weight of rising labor
costs, making companies' reported profits increasingly dependent on growth of
sales. Overall profits could thus prove quite vulnerable to a period of
significantly slower economic growth.
In view of this cooling trend, it has come as no surprise that the Federal
Reserve, though still watchful for signs of wage inflation, has not taken any
recent action to raise interest rates.
Thus, the money market is feeling the effects of economic cross-currents.
Factors tending to restrain interest rates include the demand for U.S.
instruments from foreign investors seeking a "safe haven" as well as the
prospect of the U.S. Government running a budget surplus, thus reducing the need
for Treasury borrowing. Yet, we believe that the continuing economic expansion,
albeit at a lower rate, helped to keep money market rates from going lower than
they did during the reporting period.
Supply of one-year municipal money market notes declined during the first half
of 1998 relative to the first half of 1997 by approximately 12%. Many
traditional borrowers are experiencing improved fiscal balances as a result of
broad domestic economic growth. Consequently, the need to borrow short-term has
correspondingly diminished.
Buoyed by the declining interest rate environment in the taxable money
marketplace, yields on one-year tax-exempt money market securities ranged
between 3.70% and 3.55% . Rates ended the reporting period at the lows in
anticipation of heavy demand during the summer months.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Good economic growth and sound financial management for the Commonwealth of
Massachusetts led to recent upgrades by both S&P and Fitch (from A+ to AA-).
Strong growth has been led by construction, business services, finance,
insurance, and real estate. Wealth and income levels remain very strong and
unemployment is low. Fiscal 1998 marks the seventh annual consecutive general
fund surplus. The Commonwealth has made progress on reducing its unfunded
pension, which it will now fund over 20 years instead of 30 years. Higher
ratings might be precluded by high debt levels and continuing uncertainty
involving federal funding for the $10.8 billion Central Artery/Tunnel Project,
and a grassroots appeal to end tolls on the western portion of the Massachusetts
Turnpike. These fiscal questions notwithstanding, we believe that fundamentals
remain strong and the outlook is stable.
From a strategy standpoint, the Fund's average Portfolio maturity fluctuated
within a range of 35 to 60 days. However, the Fund typically maintained an
average maturity of 50 days during the reporting period. With the backdrop of
continued inactivity from the Federal Reserve, the Fund's strategy was to
maintain a neutral average maturity relative to its peer group.
Sincerely,
[John Flahive signature logo]
John Flahive
Portfolio Manager
July 27, 1998
New York, N.Y.
* Effective yield is based upon dividends declared daily and reinvested monthly
<TABLE>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS JUNE 30, 1998
Principal
Tax Exempt Investments--99.9% Amount Value
- ------------------------------------------------------- _____________ ____________
Massachusetts--97.7%
<S> <C> <C>
Amherst-Pelham Regional School District 5%, 5/15/99 (Insured; AMBAC) . . . . . . . . . . . $ 1,107,000 $ 1,118,718
City of Boston, Revenue:
4%, Series A, 9/1/98 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 500,162
5%, Series A, 11/1/98 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,004,084
Boston Water and Sewer Commission, Revenue, VRDN
3.50%, Series A (LOC; State Street Bank and Trust Co.) (a,b) . . . . . . . . . . . . . . 3,380,000 3,380,000
Town of Brockton, Municipal Purpose Loan Revenue 5%, 9/15/98 (Insured; FSA). . . . . . . . 520,000 521,154
Town of Brookline, BAN 4%, 6/4/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,002,676
Town of Holyoke, Refunding:
PCR, VRDN (Holyoke Water Power Project) 3.20% (LOC; Union Bank of Switzerland) (a,b) . . 660,000 660,000
Revenue 5%, 8/1/98 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 515,000 515,532
Town of Marlborough 5.50% 1/15/99 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . . 790,000 797,498
Commonwealth of Massachusetts:
Refunding:
5.50%, Series A, 7/1/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000 609,895
VRDN 3.50%, Series B (LOC; Landesbank Hessen) (a,b) . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
(Consolated Loan):
Prerefunded 7%, Series A, 2/1/99 (Escrowed in; U.S. Government Securities and
Guaranteed by; Commonwealth of Massachusetts) . . . . . . . . . . . . . . . . . . . 1,250,000 1,274,293
Revenue:
7%, Series C, 12/1/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535,000 542,342
3.60%, Series A, 1/1/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,003,898
Massachusetts Bay Transportation Authority, CP
3.55%, Series C, 9/10/98 (LOC; West Deutsche Landesbank) (b) . . . . . . . . . . . . . . 5,500,000 5,500,000
Massachusetts Health and Educational Facilities Authority, Revenue:
CP:
(Boston University) 3.70%, Series H, 9/15/98 (LOC; Landesbank Hessen) (b) . . . . . . 5,000,000 5,000,000
(Harvard University):
3.50%, Series L, 9/16/98 (Guaranteed by Harvard University) . . . . . . . . . . . . 1,000,000 1,000,000
3.60%, Series L, 9/16/98 (Guaranteed by Harvard University) . . . . . . . . . . . . 1,690,000 1,690,000
Prerefunded:
(Berkshire Health Systems) 7.455%, Series A, 10/1/98 (Escrowed in: U.S. Government
Securities and Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 905,000 931,928
(Lahey Medical Clinic) 7.625%, Series A, 7/1/98 (Escrowed in; U.S. Government
Securities and Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,020,000
VRDN:
(Amherst College):
3.40%, Series F (Guaranteed by; Amherst College) (a) . . . . . . . . . . . . . . . 600,000 600,000
3.68%, Series C (Guaranteed by; Amherst College and
LOC; Merrill Lynch and Co.) (a,b) . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ ____________
Massachusetts (continued)
Massachusetts Health and Educational Facilities Authority, Revenue (continued):
VRDN (continued):
(Capital Asset Program):
3.20%, Series A (LOC; First National Bank of Chicago) (a,b) . . . . . . . . . . . . $ 900,000 $ 900,000
3.35%, Series G-1 (Insured; MBIA and SBPA; Credit Suisse) (a) . . . . . . . . . . . 200,000 200,000
3.70%, Series E (LOC; First Chicago Corp.) (a,b) . . . . . . . . . . . . . . . . . 5,800,000 5,800,000
(Falmouth Assistance For Living) 3.40%, Series A (LOC; Bank of Boston) (a,b) . . . . . 900,000 900,000
(Hallmark Health Systems) 3.40%, Series B (Insured; FSA and LOC; Fleet Bank) (a,b) . . 3,000,000 3,000,000
(Harvard University) 3.40%, Series I (Guaranteed by; Harvard University) (a) . . . . . 2,700,000 2,700,000
(Newton-Wellesley Hospital)
3.40%, Series F (Insured; MBIA and SBPA; Credit Suisse) (a) . . . . . . . . . . . . 200,000 200,000
(Partners Healthcare Systems) 3.45%, Series P-2 (BPA: Bayerische Landesbank and
Morgan Guaranty Trust Co. and Insured; FSA) . . . . . . . . . . . . . . . . . . . . 3,200,000 3,200,000
(Wellesley College) 3.70%, Series B (Guaranteed by; Wellesley College) (a) . . . . . . 4,115,000 4,115,000
(Williams College) 3.15%, Series E (Guaranteed by; Williams College) (a) . . . . . . . 3,095,000 3,095,000
Massachusetts Finance Agency, Housing Revenue, VRDN
3.70% (Insured; AMBAC and LOC; Merrill Lynch and Co.) (a,b) . . . . . . . . . . . . . . 1,415,000 1,415,000
Massachusetts Industrial Finance Agency:
Industrial Revenue:
(Morgan Memorial Goodwill Industries) 4.375%, 10/1/98 (LOC; Barclays Bank) (b) . . . . 2,625,000 2,630,502
VRDN:
(General Signal Corp.) 3.60% (LOC; Wachovia Bank and Trust Co.) (a,b) . . . . . . . 500,000 500,000
Refunding (Quamco Inc.) 3.20%, Series A (LOC; Bank of Nova Scotia) (a,b) . . . . . 2,700,000 2,700,000
PCR, VRDN (Holyoke Water Power Co.):
3.30% (LOC; Swiss Bank Corp.) (a,b) . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
Refunding 3.20%, Series A (LOC; Canadian Imperial Bank of Commerce) (a,b) . . . . . . 660,000 660,000
Prerefunded (Framingham Union Hospital)
8.625%, Series A, 7/1/98 (Escrowed in; U.S. Government Securities) . . . . . . . . . . 1,000,000 1,000,000
Revenue:
(New England College) 3.85%, 10/1/98 (LOC; State Street Bank and Trust Co.) (b) . . . 2,500,000 2,500,000
(Tufts University) 3.80%, Series H, 2/15/99 . . . . . . . . . . . . . . . . . . . . . 500,000 499,888
VRDN:
(Eastern Nazarene College) 3.40% (LOC; State Street Bank and Trust Co.) (a,b) . . . 1,000,000 1,000,000
(Goddard House) 3.40% (LOC; Fleet Bank) (a,b) . . . . . . . . . . . . . . . . . . . 1,860,000 1,860,000
(Heritage At Dartmouth) 3.50% (LOC; Bank of Boston) (a,b) . . . . . . . . . . . . . 1,500,000 1,500,000
(Milton Academy) 3.45% (Liquidity; Fleet Bank and Insured; MBIA) (a) . . . . . . . 1,000,000 1,000,000
Refunding (Showa Womens Institute) 3.70% (LOC; Lloyds Bank) (a,b) . . . . . . . . . 3,100,000 3,100,000
(Society for the Prevention of Cruelty) 3.40% (LOC; Fleet Bank) (a,b) . . . . . . . 1,000,000 1,000,000
RRR, Refunding, VRDN (Ogden Haverhill Project):
3.40%, Series A (LOC; Union Bank of Switzerland) (a,b) . . . . . . . . . . . . . . . . 2,395,000 2,395,000
3.50%, Series B (LOC; Union Bank of Switzerland) (a,b) . . . . . . . . . . . . . . . . 2,500,000 2,500,000
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------- _____________ ____________
Massachusetts (continued)
Massachusetts Municipal Wholesale Electric Company, Power Supply Systems
Revenue, VRDN
3.35%, Series C (BPA; Credit Suisse and Insured; MBIA) (a) . . . . . . . . . . . . . . . $ 2,000,000 $ 2,000,000
Massachusetts Port Authority, Revenue, CP
3.55%, Series B, 7/6/98 (LOC; Canadian Imperial Bank of Commerce) (b) . . . . . . . . . 5,000,000 5,000,000
Massachusetts Water Resource Authority:
CP:
3.60%, 8/11/98 (LOC; Morgan Guaranty Trust Co.) (b) . . . . . . . . . . . . . . . . . 3,500,000 3,500,000
3.65%, 8/11/98 (LOC; Morgan Guaranty Trust Co.) (b) . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
VRDN 3.10%, Series A (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a,b) . . . . . . . 2,600,000 2,600,000
Town of Newton 4.50%, 3/15/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,000 352,155
Town of North Attleborough, Revenue 4.25%, 3/1/99 (Insured; AMBAC) . . . . . . . . . . . . 1,010,000 1,013,726
Town of Reading, BAN 4.25%, 7/10/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,217,000 1,217,101
Town of Stoughton, Revenue 5.85%, 2/15/99 (Insured; MBIA). . . . . . . . . . . . . . . . . 1,215,000 1,231,694
Town of Westwood, Revenue 5.40%, 10/1/98 . . . . . . . . . . . . . . . . . . . . . . . . . 440,000 441,722
Town of Worchester, Municipal Purpose Loan Revenue 5%, 8/1/98 (Insured; MBIA). . . . . . . 2,430,000 2,432,198
U.S. Related--2.2%
Commonwealth of Puerto Rico Aqueduct and Sewer Authority, Revenue, Prerefunded
7.875%, Series A, 7/1/98 (Escrowed in; U.S. Government Securities) . . . . . . . . . . . 2,450,000 2,499,000
_____________
TOTAL INVESTMENTS (cost $111,330,138). . . . . . . . . . . . . . . . . . . . . . . . . . . 99.9% $111,330,166
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1% $ 63,638
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $111,393,804
_______ _____________
</TABLE>
<TABLE>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
Summary of Abbreviations
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
BAN Bond Anticipation Notes MBIA Municipal Bond Investors Assurance
BPA Bond Purchase Agreement Insurance Corporation
CP Commercial Paper PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
FSA Financial Security Assurance SBPA Standby Bond Purchase Agreement
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
- -----------------------------------------------------------------------------
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
_______ ________ _________________ ___________________
<S> <C> <C> <C>
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 78.0%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 20.9
Not Rated (f) Not Rated (f) Not Rated (f) 1.1
_______
100.0%
_______
_______
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest rates.
(b) Secured by letter of credit. At June 30, 1998, 61.9% of the Fund's net
assets are backed by letters of credit issued by domestic banks, foreign
banks and brokerage firms.
(c) Fitch currently provides creditworthiness information for a limited number
of investments.
(d) P1 and A1 are the highest ratings assigned tax exempt commercial paper by
Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
(f) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1998
Cost Value
_____________ ____________
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $111,330,138 $111,330,166
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 159,886
Interest receivable . . . . . . . . . . . . . . . . . . . 949,659
Other assets . . . . . . . . . . . . . . . . . . . . . . 111
_____________
112,439,822
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 41,196
Payable for investment securities purchased . . . . . . . 1,002,719
Interest payable--Note 3 . . . . . . . . . . . . . . . . 2,103
_____________
1,046,018
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $111,393,804
_____________
REPRESENTED BY:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . $111,398,003
Accumulated net realized gain (loss) on investments . . . (4,227)
Accumulated gross unrealized appreciation
of investments . . . . . . . . . . . . . . . . . . . . 28
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $111,393,804
_____________
_____________
SHARES OUTSTANDING
(UNLIMITED NUMBER OF SHARES OF BENEFICIAL INTEREST AUTHORIZED) . . . . . . . . . . . . . . 111,402,951
NET ASSET VALUE, offering and redemption price per share . . . . . . . . . . . . . . . . . $ 1.00
_______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1998
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . . . . . $4,272,683
EXPENSES: Management Fee--Note 2 . . . . . . . . . . . . . . . . . $ 531,090
Legal fees--Note 4 . . . . . . . . . . . . . . . . . . . 24,418
Interest expense--Note 3 . . . . . . . . . . . . . . . . 3,083
___________
Total Expenses . . . . . . . . . . . . . . . . . . . . 558,591
___________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,714,092
NET UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b) . . . . . . . . . . . . . . . . . . . 28
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $3,714,120
___________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1998 June 30, 1997
______________ _____________
OPERATIONS:
<S> <C> <C>
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,714,092 $ 2,597,779
Net realized gain (loss) from investments . . . . . . . . . . . . . . . . . . . . . . ---- 3,415
Net unrealized appreciation (depreciation) of investments . . . . . . . . . . . . . . 28 ---
______________ ______________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . . . 3,714,120 2,601,194
______________ ______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,714,092) (2,597,779)
______________ ______________
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288,336,710 227,213,640
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,359,573 965,646
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (268,566,912) (190,235,596)
______________ ______________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions . . . . . 21,129,371 37,943,690
______________ ______________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . . . 21,129,399 37,947,105
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,264,405 52,317,300
______________ ______________
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 111,393,804 $ 90,264,405
______________ ______________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
Year Ended June 30,
_________________________________________________________
PER SHARE DATA: 1998 1997 1996(1) 1995(2) 1994(3,4)
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
Investment Operations:
Investment income--net . . . . . . . . . . . . . . . . . .031 .031 .033 .032 .019(5)
______ ______ ______ ______ ______
Distributions:
Dividends from investment income--net . . . . . . . . . . (.031) (.031) (.033) (.032) (.019)
______ ______ ______ ______ ______
Net asset value, end of period . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
______ ______ ______ ______ ______
TOTAL INVESTMNT RETURN . . . . . . . . . . . . . . . . . . . 3.17% 3.12% 3.31% 3.25% 1.97%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . . . . . . . . .47% .37% .35% .35% .56%(6)
Ratio of net investment income to average net assets . . 3.15% 3.09% 3.24% 3.19% 1.94%
Decrease reflected in above expense ratios
due to undertakings by the Manager . . . . . . . . . -- .09% .02% -- --
Net Assets, end of period (000's Omitted) . . . . . . . . $111,394 $90,264 $52,317 $25,485 $19,830
- -----------------------------
(1) Effective May 8, 1996, the Fund's Investor class became shares of Dreyfus
Massachusetts Municipal Money Market Fund and Class R designation was
eliminated and the Fund became a single class Fund.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(3) Effective April 4, 1994 the Investment Class was reclassified as the Trust
shares. Effective October 17, 1994 Trust shares were redesignated as Class R
shares. The above is based upon an Investment Class share outstanding from
February 1, 1993 to April 3, 1994 and a Trust share outstanding from April
4, 1994 to October 16, 1994.
(4) Prior to April 4, 1994, The Boston Company Advisors, Inc. served as the
Fund's investment adviser. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager.
(5) Net investment income per share before waiver of fees and/or reimbursement
of expenses by the investment adviser and/or custodian and/or transfer agent
for the year ended June 30, 1994 was $.019.
(6) Annualized expense ratios before voluntary waiver of fees and/or
reimbursement of expenses by the investment adviser and/or custodian and/or
transfer agent for the year ended June 30, 1994 was .64%.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC Massachusetts Municipal Money Market Fund (the "Fund") is a
series of The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is
registered under the Investment Company Act of 1940 ("Act") as a non-diversified
open-end management investment company and operates as a series company
currently offering seven series including the Fund. The Fund's investment
objective is to provide a high level of current income exempt from Federal
income taxes and Massachusetts personal income taxes to the extent consistent
with the preservation of capital and the maintenance of liquidity by investing
in high quality, short-term municipal securities. The Dreyfus Corporation
(" Manager" ) serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. is the
distributor of the Fund's shares.
The Fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Trustees to represent the fair value of the Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Interest income, adjusted for amortization of
premiums and original issue discounts on investments, is earned from settlement
date and recognized on the accrual basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Cost of investments
represents amortized cost. Under the terms of the custodian agreement, the Fund
received net earnings credits of $965 during the period ended June 30, 1998
based on available cash balances left on deposit. Income earned under this
arrangement is included in interest income.
(C) CONCENTRATION OF RISK: The Fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
commonwealth and certain of its public bodies and municipalities may affect the
ability of issuers within the state to pay interest on, or repay principal of,
municipal obligations held by the Fund.
(D) DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, it is
the policy of the Fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $4,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to June 30, 1998. If not
applied, $1,000 of the carryover expires in fiscal 1999, $2,000 expires in
fiscal 2000 and $1,000 expires in fiscal 2002. As a result of the expiration of
a prior year capital loss carryover $7,000 was reclassified from accumulated net
realized loss to additional paid in capital.
At June 30, 1998, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
Investment management fee: Pursuant to an Investment Management agreement with
the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .45% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, fees and expenses of non-interested Trustees (including counsel
fees) and extraordinary expenses. In addition, the Manager is required to reduce
its fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel) . Each trustee receives
$27,000 per year, $1,000 for each Board meeting attended and $750 for each Audit
Committee meeting attended and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional annual fee of $25,000
per year. These fees pertain to the following funds: The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds
Trust. (The $1,000 attendance fee and reimbursement of meeting expenses are also
borne pro rata by Dreyfus High Yield Strategies Fund). These fees and expenses
are allocated to each series based on net assets. Amounts required to be paid by
the Trust directly to the non-interested Trustees, that would be applied to
offset a portion of the management fee payable to the Manager, are in fact paid
directly by the Manager to the non-interested Trustees.
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings.
The average daily amount of borrowings outstanding during the period ended
June 30, 1998 was approximately $45,100 with a related weighted average
annualized interest rate of 6.82%.
NOTE 4--DEFAULTED SECURITY:
On December 13, 1996, Middlesex County, Massachusetts defaulted on payment of
principal and interest on $1,500,000 (principal amount) County Hospital Revenue
Anticipation Notes held by the Fund. On June 17, 1997, the Fund received
$575,269 from Middlesex County, consisting of a $520,159 principal; payment and
a $55,110 payment for interest accrued as of December 13, 1996. On July 18,
1997, the Fund received the remaining $1,086,698 from Middlesex County,
consisting of $979,842 principal payment and a $106,856 payment for interest
charges for late payment. In connection with the above, legal fees of $24,418
were incurred.
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
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INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus BASIC Massachusetts Municipal
Money Market Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30,
1998, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years or period in the
five-year period then ended. These financial statements and financial highlights
are the responsibility of the Fund' s management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
as of June 30, 1998, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus BASIC Massachusetts Municipal Money Market Fund of The Dreyfus/Laurel
Tax-Free Municipal Funds as of June 30, 1998, the results of its operations for
the year then ended, changes in its net assets for each of the years in the
two-year period then ended and its financial highlights for each of the years or
period in the five-year period then ended, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
New York, New York
August 13, 1998
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
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IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended June 30,
1998 as "exempt-interest dividends" (not subject to regular Federal and, for
individuals who are Massachusetts residents, Massachusetts personal income
taxes).
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DREYFUS BASIC MASSACHUSETTS
MUNICIPAL MONEY MARKET FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 715AR986
BASIC Massachusetts
Municipal
Money
Market Fund
Annual Report
June 30, 1998
